Wednesday, May 05, 2010

Can IRS Be Forced To Check Out Informant's Tip?

In the next few weeks the U.S. Tax Court is expected to rule on a lawsuit with huge implications on the new whistleblower law. The case involves a request from an informant that the IRS be ordered to investigate his tips.

According to Forbes.com, the matter involves the estate of Dorothy Dillon Eweson, one of two children of famed Wall Street financier Clarence Dillon (1882-1979). She died in 2005 at age 92, leaving behind what has been estimated at $300 million held personally and in trusts.

Five years later, the estate remains mired in probate litigation. In court papers Ann S. Peipers, widow of Eweson grandson David H. Peipers, who died of Legionnaires disease at age 48 two months before his grandmother, charges that other Eweson heirs improperly maneuvered to cut back a huge inheritance for her still-minor son, a great-grandchild of Eweson.

Ann Peipers' new boyfriend, Nashville lawyer William Prentice Cooper III, sought to take advantage of the tax whistleblower law, which Congress passed in 2006. It mandates a minimum 15% reward for collections resulting from tips. In August 2008 Cooper filed with the IRS' new Whistleblower Office the first of several Form 211 applications "for award for original information."